Sale of Vero Beach's electric utility No. 1 issue in council race

VERO BEACH — The sale of Vero Beach's electric utility and its aftermath remains the No. 1 issue in the upcoming City Council race.

Nothing else comes close when considering issues related to the city election, according to Mayor Pilar Turner, who along with Vice Mayor Craig Fletcher and Councilman Jay Kramer, is seeking another term on the council. They face challenges from former Councilman Brian Heady, attorneys Dan Stump and Nick Thomas, and political newcomer Karen Kozdra.

Three years ago, the municipal electric rates reached a high of $158.82 per 1,000 kilowatt hours, while Florida Power & Light Co. customers' rates were $53 lower.

Vero Beach's rates dropped after a new power provider contract with Orlando Utilities Commission took effect and reached a low of $109.14 for a short time in 2011 for a brief period. By that time, however, FPL's rates had fallen again.

The most current rate report from the Florida Municipal Electric Association lists Vero Beach's rate at $121.43 compared to $92.35 for FPL.

FPL's lower rates will not come without a significant cost to the city, as the sale of the utility will mean that the city will no longer receive the more than $7 million in revenue that is now annually transferred into the city's general fund to support other services. Making up for this loss could mean higher taxes and fees and reduced city services.

The city already has cut some wages, benefits and employees and raised some fees. City Manager Jim O'Connor said these actions were taken in response to several issues, including depressed property values and tax revenue, rather than just the potential loss of revenue from the electric utility.

At the same time, officials are keeping the potential loss of that revenue in mind, he said. The philosophy that O'Connor has passed on to his department heads is that the city "will provide the services that people are willing to pay for."

Turner said she doesn't see people questioning the sale itself, but they want to get a handle on what the city might look like in five years.

Kramer has been promoting the idea of looking at selling only that part of the electric system that lies outside the city limits. He said he has been getting "excellent response" to his idea, which Kramer said could produce lower rates without raising taxes.

"I think people want to know if there are any other options out there," Kramer said.

Turner doesn't like the partial sale idea. She thinks it would actually leave rates high and cause taxes to increase.

Fletcher said he has broached other subjects during the campaign, but the top focus remains the electric issue.

What seems to be getting lost in the discussion about the details of the sale and its potential aftermath, he said, is the significant rate savings that residents would see under FPL.

Thomas stands out in opposing the sale to FPL, contending there is no guarantee FPL's rate will remain lower and that city taxes could double to fill the budget gap left by the loss of the electric revenue.

Although FPL has the lowest rates in the state for 1,000 kilowatt hours' usage, some municipal utilities are lower than the private utility at higher usage levels, according to rate information from the Florida Municipal Electric Association.

Heady favors the sale, but said it's a myth that he ran for City Council three years ago on a platform of selling the city's electric system. Instead, his campaign issue at that time had to do with elected city officials entering into a power provider contract with Orlando Utilities Commission without being aware of all the details and impacts. That issue remains much the same today, he said, in regard to the contract city officials have signed with Orlando Utilities Commission to take over the city's current wholesale power in the event of a sale to FPL.

Stump has been solidly in favor of the sale, along with Turner and Fletcher. Kozdra has said she believes the sale has already been decided and the issue is now what will be done with the money the city receives from the sale.

Ancillary to the electric sale, is whether there should be a referendum on any proposed sale.

A referendum is supported by the majority of candidates, including Fletcher and Thomas. Fletcher, however, said the referendum should not take place until the sales agreement is ready so people know on what they are voting on.

Stump and Turner have opposed the referendum. Turner said she believes in representative government and spoke of the difficulty of people trying to understand the complexities of the deal that she's been studying for some time.

Still, she said she does want to hear people's views on the deal and notes that residents will be able to voice their views at public meetings held on the proposal.